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Judge Dismisses Civil Claims Against Texas AG Ken Paxton

Judge Dismisses Civil Claims Against Texas AG Ken Paxton

Still facing criminal charges

A year and a half ago, Texas Attorney General Ken Paxton was arrested and charged with three counts of felony securities fraud violations, namely that he duped investors prior to being elected AG.

In 2015 we blogged:

Earlier, a grand jury handed down an indictment addressing Paxton’s July 2011 efforts to sell stocks on behalf of a McKinney, Texas-based corporation while he was still a member of the Texas House of Representatives.

Paxton followed in the footsteps of fellow embattled Texas politicians Tom DeLay and Rick Perry by putting on a confident smirk for his mugshot. According to local media sources, however, Paxton avoided the press after he was booked. (I don’t blame him—the Texas Democratic Party organized a rally outside the building demanding he resign on the spot.)

Today, a federal judge dismissed the civil charges, and with prejudice.

The WSJ reports:

A federal judge has dismissed civil claims that Texas Attorney General Ken Paxton defrauded investors by recruiting them to invest in a technology company without disclosing he was being compensated to promote the company’s stock.

U.S. District Judge Amos Mazzant dealt the Securities and Exchange Commission a defeat in an order released Thursday. Judge Mazzant found Mr. Paxton didn’t have a legal duty to tell investors he got shares in the company, Servergy Inc., in exchange for raising $840,000 in investor funds.

“The primary deficiency was, and remains, that Paxton had no plausible legal duty to disclose his compensation arrangement with investors,” Judge Mazzant wrote.

“I have maintained all along this whole saga is a political witch hunt,” Mr. Paxton said in a written statement. “Today’s ruling to dismiss the charges with prejudice confirms that these charges were baseless when the SEC initially brought them.”

SEC spokesman John Nester declined to immediately comment.

The alleged violations took place before Mr. Paxton’s election as attorney general, when he was a state lawmaker representing a suburban Dallas district.

Paxton still faces criminal charges, which are almost identical to the civial charges recently dismissed. That trial is currently scheduled for May 1.

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Gremlin1974 | March 2, 2017 at 5:55 pm

I would bet that the criminal charges will be dismissed in the next couple of weeks, I am sure it will take a motion by Paxton to the court to get this done.

It is my understanding that as a general rule it is easier to win a civil trial than a criminal one. (i.e. O.J. No murder conviction but lost the civil suit.) So it would seem to me if they can’t even win the civil suit, the chances of them winning in criminal court arent’ very good.

    Not to mention “… a federal judge dismissed the civil charges, and with prejudice.”

    That’s a phrase you don’t hear very often, much like the plaintiff getting hit in the face with a baseball bat by the judge.

      Olinser in reply to georgfelis. | March 2, 2017 at 7:09 pm

      Phrases like that are usually accompanied by orders to pay large amounts of money to the defendant for their court costs, fees, and lost time.

        Gremlin1974 in reply to Olinser. | March 2, 2017 at 8:53 pm

        That’s what I was thinking. How crap does the government’s case have to be for a federal judge to give such an order?

The big difference between the two sets of charges, and the reason that criminal charges are now almost certainly dead, is that the Civil charges only had to be proved by a preponderance of the evidence (51%, basically) while Criminal charges have to be proved beyond a reasonable doubt, 99.99%.

If you can’t win a case on the preponderance of the evidence, you don’t have a chance of proving anything beyond any reasonable doubt.